Prediction: This Could Be Palantir's Stock Price By the End of 2027

Palantir Technologies (NASDAQ: PLTR) has been something of a rollercoaster ride for investors in recent years. After unveiling its Artificial Intelligence Platform (AIP) in early 2023, Palantir became one of the biggest battleground stocks of the artificial intelligence (AI) era. After gaining 2,350% in about two-and-a-half years, Palantir stock shifted into reverse, falling more than 35% from its peak (as of market close on Thursday).

The bulls argue that Palantir's AI solution has no real competition and will propel the company to new heights. Bears point to the stock's egregious valuation and suggest there's only one way from here -- and that's down.

I believe there's merit to both arguments. Let's dig a little deeper to find out where Palantir's stock price could be heading over the next couple of years.

Image source: Getty Images.

What's driving the gains?

While Palantir made its name by creating AI solutions for the U.S. intelligence, military, and other government agencies, its recent success can be traced to the rapid commercial adoption of its AIP. The company's strategy involves ontology, the AI framework that sits atop an organization's systems, integrating the data and providing actionable insights based on its analysis. This allows customers to immediately put AI to work, helping managers make crucial business decisions.

Palantir has been wildly successful, as shown in its financial results. In the first quarter, the company generated revenue of $1.63 billion, which jumped 85% year-over-year -- marking the company's highest-ever year-over-year growth rate and climbing 16% quarter-over-quarter. This drove adjusted earnings per share (EPS) of $0.33, which soared 154%. This marked the 11th consecutive quarter of accelerating revenue.

Palantir also reported a remaining performance obligation (RPO) -- or contractually obligated sales not yet included in revenue -- of $4.45 billion, which provides a firm foundation for future growth.

The biggest driver was its U.S. commercial results, which surged 133% to $595 million. Palantir's government business is still making a meaningful contribution, up 84% to $687 million. One significant development was the Pentagon's decision to designate Palantir's Maven Smart System as an official "program of record," a move that serves as tacit approval for its use across all branches of the U.S. military.

Taken together, this shows that Palantir is -- if you'll excuse the cliché -- firing on all cylinders.

Here's the math

If we use its recent growth rate as a guide, we can estimate Palantir's stock price by the end of 2027.

I don't want to get too deep in the weeds here, but it's important to use numbers grounded in reality so this isn't just guesswork. We'll also have to make a few assumptions.

Palantir's full-year 2026 forecast is guiding for revenue of $7.66 billion, representing year-over-year growth of 71%, an acceleration from its 56% growth in 2025. Given the company's tendency to underpromise and overdeliver, that's likely conservative. Assuming Palantir can maintain its forecasted growth rate over the coming two years -- and that's a big "if" -- its 2027 revenue will be about $13.1 billion.

Palantir's profit margin has been rising steadily since early 2025 and now stands at 53%. For the sake of conservatism, let's assume 53% over the next two years (though history suggests it will likely be higher). Revenue of $13.1 billion and a 53% profit margin would generate net income of roughly $7 billion.

With its current share count of 2.57 billion, that would result in EPS of $2.70, a fourfold increase compared to 2025. Palantir stock is selling for 151 times earnings (as of market close on Thursday). If its valuation remained constant (it won't), the stock price would rise 205% to $408 -- driving Palantir's market cap to over $1 trillion.

The fine print

This has been overly simplistic and little more than fun with numbers. Bears will be quick to point out that, at some point, Palantir's accelerating growth will inevitably stop accelerating. When that happens, its valuation will likely be swiftly and severely rerated.

Moreover, the company's stock price and its financial results are extremely dynamic. For example:

• Its revenue growth could continue to accelerate (or decelerate).
• Palantir could invest heavily in future growth, pressuring its margins (or margins could continue to expand).
• A competitor could "invent a better mousetrap," making Palantir's offering obsolete.
• The stock's valuation could (and likely will) continue to moderate.
• The economy could tank, and businesses could rein in spending, which could pressure Palantir's results.

Changing any of the above inputs will dramatically change the outcome -- for better or for worse.

To be clear, there's no way to know whether Palantir will reach those lofty heights. That said, the company's trajectory is unmistakable.

Finally, while the most commonly used valuation metrics suggest Palantir is wildly overpriced, they don't take into account the company's phenomenal growth rate. Using the more appropriate price/earnings-to-growth (PEG) ratio yields a multiple of 0.52, when any number less than 1 is the standard for an undervalue stock.

Given what we know now, the company's accelerating growth, and vast opportunity ahead, I would submit that Palantir stock is a buy.

Danny Vena, CPA has positions in Palantir Technologies. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.